diff --git a/freqtrade/rpc/api_server/api_auth.py b/freqtrade/rpc/api_server/api_auth.py
index 110bb2a25..a39e31b85 100644
--- a/freqtrade/rpc/api_server/api_auth.py
+++ b/freqtrade/rpc/api_server/api_auth.py
@@ -44,7 +44,7 @@ def get_user_from_token(token, secret_key: str, token_type: str = "access"):
     return username
 
 
-def create_token(data: dict, secret_key: str, token_type: str = "access") -> bytes:
+def create_token(data: dict, secret_key: str, token_type: str = "access") -> str:
     to_encode = data.copy()
     if token_type == "access":
         expire = datetime.utcnow() + timedelta(minutes=15)
diff --git a/requirements.txt b/requirements.txt
index b564a4244..1d0d57091 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -30,7 +30,7 @@ sdnotify==0.3.2
 # API Server
 fastapi==0.63.0
 uvicorn==0.13.3
-pyjwt==1.7.1
+pyjwt==2.0.0
 
 # Support for colorized terminal output
 colorama==0.4.4
diff --git a/tests/rpc/test_rpc_apiserver.py b/tests/rpc/test_rpc_apiserver.py
index dfb0fb956..2212d4a79 100644
--- a/tests/rpc/test_rpc_apiserver.py
+++ b/tests/rpc/test_rpc_apiserver.py
@@ -93,7 +93,7 @@ def test_api_auth():
         create_token({'identity': {'u': 'Freqtrade'}}, 'secret1234', token_type="NotATokenType")
 
     token = create_token({'identity': {'u': 'Freqtrade'}}, 'secret1234')
-    assert isinstance(token, bytes)
+    assert isinstance(token, str)
 
     u = get_user_from_token(token, 'secret1234')
     assert u == 'Freqtrade'